The questions below are taken from comments posted on the articles of this website on the subject of the taxation of cryptocurrencies. They therefore come from visitors to the site.

IMPORTANT: the information provided below is general in nature. For an analysis of your specific situation, consult a lawyer.

Topic 1: the difference between private individual status and professional status

1) Regarding the distinction between professional and occasional traders, how will a retired person be treated if the volume of transactions is reasonable and does not involve the use of any software or bots?

Being retired should not, in principle, in itself lead to classification as a professional, even though the person does indeed not carry on a full-time professional activity. If the other criteria of professional status are not met, this person would appear to have a relatively significant likelihood of being considered an occasional trader.

2) Where is the boundary between occasional activity and habitual activity, or more precisely, after how many conversions of cryptocurrency gains into euros, or above what amount of capital gain, does one move from occasional activity to habitual activity? The tax authorities do not seem clear on this point. What is the tax regime applicable to persons without an occupation (e.g. the unemployed)?

Furthermore, when our activity is considered by the tax authorities to be a habitual activity, does that mean that we are considered professionals (independent traders trading for their own account)? Consequently, is it necessary to set up a business (e.g. a sole proprietorship (EI) or a single-member limited liability company (EURL))?

For habitual activity, do cryptocurrencies not fall into the same category as other asset classes (shares, CFDs, FOREX, etc.)? What then happens if one invests both in cryptocurrencies and in other asset classes?

There are not many precise texts on this point to date. The administrative guidelines state that the criteria for habitual or occasional exercise of the activity result from a case-by-case examination of the factual circumstances in which the purchase and resale transactions are carried out (the time between the purchase and resale dates, the number of digital assets sold, the conditions of their acquisition, etc.). On the basis of the answers to the tax ruling requests (rescrits) I have filed for my clients and on the basis of the few scraps of texts that exist on this subject, the following parameters appear to be important: carrying on a professional activity outside cryptocurrencies, the volume of orders placed, the use of bots or software, the intervals between orders…

If you are considered a professional by the tax authorities, the consequences will generally be very severe, since you are supposed to have a SIREN number and to have filed the appropriate tax and social security returns. This is why this very important point should be considered upstream and, in case of doubt, the advisability of a tax ruling request should be considered.

Trading in cryptocurrencies, when considered professional, has been taxable in the category of non-commercial profits (BNC) since 1 January 2023 (industrial and commercial profits (BIC) previously). Mining of cryptocurrencies is currently taxable in the BNC category.

This transfer of trading in cryptocurrencies, when considered professional, into the BNC category since 1 January 2023 results from Article 79 of the Finance Act for 2022 (loi de finances pour 2022, Law No. 2021-1900 of 30 December 2021).

3) Has the administration provided any clarification regarding the notion of professional or occasional? Let us imagine an investment in 2020 on a cryptocurrency platform. The platform offers daily interest on funds locked for the short term in cryptocurrency. This remuneration is paid in that same cryptocurrency.

Let us imagine an investment of €10,000 in a cryptocurrency for 20,000 tokens at €0.50 received in return for the investment. The idea is to reinvest this interest daily.

Hypothesis: in 6 months, I hold 24,000 tokens at a price of €0.60. I then wish to withdraw my invested capital and, in 12 months, all of my capitalised gains. In calculating the capital gain, should the rise in the token price be distinguished from the remuneration by daily interest on the locked funds? Does the fact of manually reinvesting the interest every day presume professional behaviour and therefore a BIC category?

Unfortunately, the administration did not provide any further clarification in the latest Official Public Finance Bulletin (Bulletin officiel des finances publiques, Bofip) regarding the occasional/professional classification. The administrative guidelines state that the criteria for habitual or occasional exercise of the activity result from a case-by-case examination of the factual circumstances in which the purchase and resale transactions are carried out (the time between the purchase and resale dates, the number of digital assets sold, the conditions of their acquisition, etc.).
On the question of interest generated in tokens on underlying assets in tokens, the tokens received as interest could perhaps be regarded as taxable under the standard conditions, namely in the category of investment income (revenus de capitaux mobiliers) (single flat-rate levy (prélèvement forfaitaire unique), known as the “flat tax”, at 31.4% since 2026 – 30% previously –, unless an option is exercised otherwise). This should have relatively little tax impact, since the new regime applicable to gains on cryptocurrencies realised by non-professionals also provides for flat-rate taxation at 31.4% for capital gains realised from 2025 onwards (Social Security Financing Act (LFSS) 2026; 30% previously). One question would then be the resale of tokens already taxed at the time of their receipt. Double taxation would then have to be avoided. Unfortunately, this relatively technical question has not been settled at all to date.

4) A question arises with regard to people registered on the eToro or IG platforms who trade regularly. Which regime do they fall under? How should their tax return be completed? Are they considered occasional or habitual traders?

The platform used matters little. What matters, in particular, is the regularity of the trades, whatever the platform used. Moreover, the regularity of the trades is not the only criterion. To be recognised as habitual, it might seem that several criteria would have to be met. Save in exceptional cases, a single criterion being met should not, in principle, in itself entail classification as habitual.

5) Let us imagine that I start a trading activity in January. I consider myself an occasional trader. I file my tax return in May and, ultimately, the tax authorities decide that I am a habitual trader based on the assessment of my personal situation, since it is on a case-by-case basis. Can they claim the contributions due in respect of the turnover generated from January to May, or will the contributions only be due from the moment they rule on the habitual nature?

Given that the tax authorities attach importance, in particular, to whether or not one is an employee in deciding on the habitual or occasional nature, what would happen if, after having been ruled occasional, one of the two persons in a couple – since, overall, the administration considers the couple as a single tax household – lost their job? Would that call the occasional nature into question?

Occasional status entails a tax return in May of year N+1 in respect of the transactions of year N. If the administration were to reclassify the person as habitual, its decision would be retroactive to past transactions (within the limits of its right of reassessment, of course).

It is not necessarily a matter of being an employee, but of having a full-time activity outside cryptocurrencies (for example, as an employee or a self-employed person). This criterion appears important, but is not decisive on its own. The volume of transactions and the use of bots, as well as many other criteria, would in particular also be taken into account. In a couple, the analysis would focus on the person who carried out the cryptocurrency transactions and not on the couple: taxation takes place at the level of a household, but the occasional/habitual analysis would be made at the level of the person carrying out the transactions.

6) How can one know whether one falls within the scope of a professional trader? Personally, I practise a liberal profession, but I have invested a significant amount in cryptocurrency. If one day there is a sharp rise in it, I will then have a large profit, perhaps much larger than my salary, even though I only trade at most 3 transactions per month and it takes up none of my time. Would I be considered a professional just because I invested in the right product and it earned me a great deal?

Professional status in principle has no direct link to the size of the gain. The size of the gain would appear to be one criterion among others. It is a case-by-case assessment; the following elements are in principle taken into account in particular: carrying on a full-time activity outside cryptocurrencies; volume of transactions (number of orders placed); intervals between orders; origin of acquisition of the cryptocurrencies; use of software to place orders automatically; size of the gain, etc., i.e. any criterion that appears relevant. In case of doubt, only a tax ruling request (rescrit) makes it possible to be certain of one’s status, but it should be noted that a tax ruling request is not anonymous.

7) What exactly is meant by an occasional disposal? Let us imagine a purchase in 2018 of several cryptocurrencies (n XRP, n DASH, n BTC, n XLM…) for investment and not trading purposes. It is therefore not a matter of making regular acquisitions or sales as a professional might do in the course of their activity. In my view, the case resembles neither a professional activity nor a regular activity. Let us assume that these cryptocurrencies increase in value over time and that the person decides to dispose of all of them progressively during 2020 in order to make a profit. If the disposal of each of them generated a taxable capital gain (above €305), must each disposal be declared separately, or is it possible to declare a single overall disposal for all these sales? If each disposal must be declared separately, there would therefore be several disposals to declare in the same year (2020, to stay with my example), even though each of them was acquired two years earlier. Does this still fall within the scope of occasional disposals under Article 150 VH bis?

What an occasional trader is has not been precisely defined. However, several parameters may be taken into account, although it is in any event a case-by-case assessment: carrying on a full-time activity outside cryptocurrencies (as an employee, for example); a small number of trades; no use of software to place orders automatically, etc. All the 2020 disposals will have to be reported on the schedule, but it is the total amount of the net gain (capital gains – capital losses) that will, it seems, have to be indicated on the income tax return. Each disposal is calculated separately, but the return will cover the overall annual amount of the net gain. The fact that there are several fiat disposals (fiat is currency decreed by a State and then issued under its authority) during the year does not seem to me, in itself, to call into question the applicability of 150 VH bis, provided that the number of disposals remains low.

8) From how many trades per year is one considered a professional trader?

The criteria for habitual (“professional”) or occasional (“private individual”) exercise of the activity result from a case-by-case examination of the factual circumstances in which the purchase and resale transactions are carried out (the time between the purchase and resale dates, the number of digital assets sold, the conditions of their acquisition, etc.).

To date, the texts do not refer to any threshold in terms of number of trades.

9) How can an occasional trader be distinguished from a habitual one? Let us imagine a person who invests €5,000 over 2 years and whose capital gain exceeds €250,000. Will they be considered to have habitual or occasional status?

The criteria for habitual (“professional”) or occasional (“private individual”) exercise of the activity result from a case-by-case examination of the factual circumstances in which the purchase and resale transactions are carried out (the time between the purchase and resale dates, the number of digital assets sold, the conditions of their acquisition, etc.). The amount of the gain will therefore not necessarily appear to be the most important criterion. Indeed, one can imagine the case of a person, a civil servant or full-time employee or a liberal professional in a full-time activity for years, who acquired 10,000 BTC (Bitcoins) at the very beginning of Bitcoin in 2011, for €20,000. This person then does nothing further (no purchases, sales or exchanges) until the end of 2017. At the end of 2017, they sell everything. The gain is huge. However, it seems that this person would probably be considered an occasional trader. In case of doubt, the advisability of filing a tax ruling request should in any event be considered.

10) To determine whether the activity is occasional or habitual, does the administration take into account only transactions between cryptocurrencies, or also transactions in fiat?

There is no specific text on this question, but it would seem to me that, in principle, all transactions, even those between cryptocurrencies, would be taken into account. Moreover, the number of transactions is not the only criterion. The criteria for habitual (“professional”) or occasional (“private individual”) exercise of the activity result from a case-by-case examination of the factual circumstances in which the purchase and resale transactions are carried out (the time between the purchase and resale dates, the number of digital assets sold, the conditions of their acquisition, etc.).

11) Are “crypto-to-crypto” transactions exempt, unless a capital gain is realised between two cryptocurrencies (I exchange 10 ETH for 10 LTC, for example)?

“Crypto-to-crypto” transactions are not taxable under the new regime applicable to private individuals. Only transactions whose consideration is fiat or a good or service (purchase of a good or service with cryptos) are taxable, if a gain is generated.

Topic 2. The new tax regime.

12) My question concerns the 2021 return, which will certainly follow the same rules as in 2020. I have read all the comments, but I have not clearly understood the case of gains on derivatives trading (for example “swaps” on “BitMEX”). Example: purchase of 0.1 BTC in January 2020 for €1,000; derivatives trading on “BitMEX”, gain of 0.9 BTC over a large number of trades over several months (portfolio = 0.1 + 0.9 BTC); sale of 1 BTC in October 2020 for €13,000. Should only one disposal be declared, according to this calculation: 13,000 – (1,000 X 13,000 / 13,000) = 12,000? If not, how should all the micro-transactions be declared, given that they do not give rise to a conversion into fiat?

To my knowledge, there is to date no clarification regarding derivatives in relation to cryptocurrencies. Seen from afar, from a strictly legal point of view, the tax regime for cryptocurrencies would appear not to apply to derivatives. That said, from a practical point of view, I imagine that a taxpayer (with occasional status) acting in good faith who applied the cryptocurrency tax regime to cryptocurrency derivatives, by declaring a taxable gain of their own accord, as in your example (which is correct in terms of calculation), would in all likelihood have only a low probability of being penalised by the tax authorities. Nevertheless, two major points of attention remain in your example: the large number of trades and the fact that derivatives are involved, which could contribute to giving the taxpayer professional status. As regards derivatives, this seems to me to be where the main issue lies. Transactions on this market generally require certain skills or at least knowledge (at least in theory, setting aside the excesses of certain users on applications such as Robinhood, which are more akin to gambling than to organised trading…), and the volume of transactions is generally higher, which contributes to giving the taxpayer a potentially professional profile. In my view, this is above all where the tax authorities might take issue.

13) If we have several sales in the same year, at each sale the acquisition price will have to be revalued following the previous sale, therefore: new acquisition price = previous acquisition price – (previous disposal price – result obtained on the previous sale). If in the meantime the person has made purchases, I assume that: new acquisition price = previous acquisition price + price of purchases made – (previous disposal price – result obtained on the previous disposal). Is this correct?

With regard to gains obtained through staking (locking up tokens to generate tokens) or cashback (example: “crypto.com card” = fiat payments > receipt of tokens): are the declaration and taxation made upon the disposal of these cryptocurrencies? I do not find it logical to have to declare (and pay) upon receipt, for various reasons, but I cannot find clear information on these subjects. Let us imagine a person who obtains tokens through cashback/staking. Their value is €1,000, so he pays €300. But in the end this token collapses, so he has nothing… Does he pay €300 for money he never had? If the token does not collapse but its value falls drastically, the problem is the same: the danger of having to pay more money than he actually earns. If he obtains cashback each time he uses the card and he uses it 3-4 times a day, say 1,000-1,200 times a year: how can the value of the cryptocurrency be tracked at each receipt and the gains and losses calculated each time? In that case, should we not use the “magic formula” by giving each token obtained through staking/cashback a purchase price of €0? This would give us a capital gain equal to the disposal price for this type of token.

Now that the first tax year with the obligation to declare cryptocurrencies has passed, do we not have any official information for these cases?

This is correct as regards the calculation of the acquisition price.

As regards staking, there is no specific text on this point. It could perhaps one day be regarded (when more precise texts are published) as the equivalent of interest and therefore be taxed as investment income on the value of the coins at the time of their allocation, but this would not change much, since it is the flat tax of 31.4% (30% before 2026) that applies. On 1,000 tokens at €1 allocated through staking, there could then be taxation at 31.4%, in the category of investment income. If the coins are then resold for 600, there would then be a capital loss of 400, which does fall within the 150 VH bis regime (regime for gains and losses on cryptocurrency) and which could be offset against the capital gains of the same year.

Once again, these are mere assumptions; to date, there is no official information on these cases.

14) I have a basic question, but I cannot find the answer. Let us imagine a person who buys 10 CRO at 0.145 each; she buys 10 CRO at 0.13 each; she sells 10 CRO at 0.14 each; she sells 10 CRO at 0.2 each.

So she will use the formula: disposal price – (total purchase price of the portfolio X disposal price/total value of the portfolio at the time of the disposal) = capital gain or loss to be declared. First sale: 1.4 – (2.75 X 1.4 / 28) = 1.2625.
Second sale: she decides to sell the 10 CRO I have left, therefore: 2 – (total purchase price of the portfolio X 2 / 2) = capital gain or loss to be declared.

What is the total purchase price of the portfolio that she must declare? She has already sold part of it in the first sale, so it is not logical to declare 2.75 again.

Answer, 1^st sale: 1.4 – (2.75 X 1.4 / 2.80) = 0.025. Capital gain of 0.025.
Answer, 2^nd sale, revaluation of the acquisition price following the 1^st sale: 2.75 – (1.4 – 0.025) = 1.375 and 2 – (1.375 X 2 / 2) = 0.625. Capital gain of 0.625.

The total taxable capital gain is therefore 0.025 + 0.625 = 0.65.

Since the entire portfolio has been liquidated, this can be verified by noting that the total sale prices (3.4) minus the total purchase prices (2.75) do indeed give us the 0.65 of total capital gain.

15) Regarding the 2086 schedule, should we complete the capital gains together with the capital losses? To determine a portfolio value when holding two different cryptocurrencies, for example ETH and BTC, can we use historical rates from a cryptocurrency website such as Coinmarket, for example? Do you know the amount of capital gain that a private individual must not exceed in order not to be considered a professional?

Coinmarketcap could indeed perhaps serve as a reference for determining the values of the cryptos in the portfolio, since it is one of the reference websites. Professional status does not appear to be directly and solely correlated with the amount of the total gain.

16) Is professional status required for staking, as for mining?

Cryptocurrency mining is taxable as BNC, which in principle entails obtaining a SIREN number. There is to date no text on cryptocurrency staking. If it were in the future regarded as mining, it would then in principle be necessary to have a SIREN number. Since staking is by nature quite different from cryptocurrency mining in the sense of proof-of-work mining or holding a proof-of-stake transaction validation node, one can only hope that it will not be regarded as mining in the future.

17) How should we declare staking? Is it treated as mining?

Unfortunately, there is to date no reference to staking in the applicable tax documentation.

18) Can a stock market capital loss be deducted from a capital gain on digital assets?

Under the texts as they currently stand, no.

19) Just to check regarding legal tender currencies, or fiat: for tax purposes, I understood that the disposals covered by the declaration of capital gains or losses concerned only exchanges into currencies such as the dollar, the euro, the yen, etc., but did not concern USDT or other stablecoins?! Where do we stand with the regulations?

More precisely, the exchanges concerned are those against fiat (legal tender currencies), as well as exchanges against goods or services (a rarer case). Exchanges against stablecoins are not, to date, regarded as taxable transactions; at least, no clarification on this point appears to have been provided. Please note that things could change, in particular as a result of case law (court decisions). In any event, no text to date states that exchanges against stablecoins must be regarded as taxable.

20) Regarding the fraction of initial capital: if the portfolio is made up of several cryptocurrencies such as BTC, ETH and XRP, in the event of the sale of all the XRP in the first disposal, must the initial capital be taken into account in the second disposal concerning the total sale of BTC and ETH? Or does this notion of fraction of initial capital only concern the partial sale of the same asset?

Yes, it will have to be taken into account. This notion does not concern only sales of the same assets. Each sale affects the acquisition price, which must therefore be recalculated at the next sale.

21) I am still unsure about the application of the €305 exemption. Reading what you write below: “In accordance with Article 150 VH bis, II-B of the French General Tax Code (CGI), taxpayers are exempt from taxation where the total of the disposal prices (excluding exchange transactions with deferred taxation) does not exceed €305 during the tax year. The €305 threshold is assessed taking into account all taxable disposals, whatever their consideration (currency, good, service), carried out by the tax household during the tax year, directly or through an intermediary (BOI-RPPM-PVBMC-30-10 n^os 90 and 110). In the case of a disposal carried out through an intermediary, the disposal price is taken into account in proportion to the share corresponding to the partner’s rights in the company (aforementioned BOI n^o 110). Where the threshold is exceeded, the taxpayer is taxed on all disposals carried out during the tax year, including those whose price does not exceed the €305 threshold (aforementioned BOI No. 100).” Does the last sentence mean that the €305 exemption applies per disposal and not to the annual total?

All the disposal prices must be added together. If this total exceeds €305, all the disposals are taxable. If the total does not exceed €305, all the disposals are exempt.

Example 1: disposal for €100 on 4 January 2019, followed by a disposal for €200 on 12 December 2019: total €300, these two disposals are exempt.

Example 2: disposal for €100 on 4 January 2019, followed by a disposal for €200 on 12 December 2019, followed by a disposal for €80 on 14 December 2019: total €380. All three disposals are taxable. The taxable gain must then be calculated, which will be taxed at 30% (31.4% since the LFSS 2026).

22) Looking at form 2086, I would like to understand what the heading “Fractions of initial capital contained in the total acquisition price” means. In what case should it be used and how? In the case of the partial sale of an asset, the recalculation of the acquisition value at the 2^nd disposal involves a reduction of the gain obtained on the 1^st disposal. Why?

It makes it possible to recalculate the acquisition price following a taxable disposal. When a disposal against fiat takes place, cryptocurrencies by definition leave the portfolio; the acquisition price that will be used in the formula for the next taxable disposal must therefore be recalculated. The fraction of initial capital corresponds to the nominal amount (at acquisition price) of the cryptocurrencies that have left the portfolio (been disposed of). Example:

• On 1^st January 2019, acquisition of 1 BTC for €3,800;
• on 1^st February 2019, acquisition of 1 BTC for €3,300;
• on 7 April, disposal of 1 BTC for €4,800;
• on 10 May, disposal of 1 BTC for €7,500.

Calculation of taxable gains (application of the formula of Article 150 VH bis of the CGI): 7 April: 4,800 – (7,100 X 4,800 / 9,600) = 1,250. 4,800 represents the disposal price; 7,100 represents the purchase price of the portfolio (3,800 + 3,300); 4,800 is again the disposal price; 9,600 is the market value of the portfolio at the time of the disposal (2 BTC at a price of €4,800).

10 May: 7,500 – (3,550 X 7,500 / 7,500) = 3,950; 7,500 represents the disposal price; 3,550 represents the purchase price of the portfolio: 7,100 – (4,800 – 1,250). The purchase price is reduced by the fraction of initial capital contained in the previous fiat disposal (4,800 – 1,250 = 3,550, which represents the fraction of initial capital); 7,500 is again the disposal price; 7,500 is the market value of the portfolio at the time of the disposal (1 BTC at a price of €7,500).

23) I have a question about completing the form regarding the acquisition price.

For disposal 1: if a person bought €6,000 of BCH, their portfolio is worth €15,000, and they decide to make a disposal of €6,000, their acquisition price is €6,000.

For disposal 2: the portfolio is worth €9,000 and they decide to sell everything, i.e. €9,000. They have not made any other purchases. Is their acquisition price €3,600?

If the person has several cryptocurrency accounts, must they declare the others following the disposals?
Must the accounts be declared on form No. 3916 for foreign accounts?

Disposal 1: gain = 6,000 – (6,000 X 6,000 / 15,000) = 3,600

Disposal 2: the acquisition price must be revalued: 6,000 – (6,000 – 3,600) = 3,600; gain = 9,000 – (3,600 X 9,000 / 9,000) = 5,400. These gains are reported on returns 2086 + 2042 C.

Foreign cryptocurrency accounts are reported on 3916 bis returns.

24) What does the term “Balancing payment (soulte) received or paid on the disposal” on return form 2086 correspond to?

The balancing payment (soulte) represents a sum of money paid to compensate for an imbalance. This is a very rare case in cryptocurrency matters, unless exchanges are made directly between individuals without going through an exchange. Example: A gives 1 BTC and receives in exchange 40 ETH + €500. The €500 represents the balancing payment.

25) I acquired crypto-assets over the period 2014-2018. The problem arises in determining the acquisition value. Here is an example: 1 BTC acquired in 2014 at €300/unit. I made several “crypto-to-crypto” exchanges, but also fiat withdrawals that were reinvested. Sale of 0.9 BTC X 500 = €450.

Early 2019: I end up with: 0.1 BTC, 1 ETH, 25 LTC, 100,000 siacoin, 770 XRP.

In reality, only 15 LTC (15 X 30) were purchased with the fiat recovered from the sale of BTC. All the other crypto-assets were acquired through “crypto-to-crypto” exchanges. How can the acquisition price of the latter be determined? 300 + 15 X 30 = 750?

A snapshot of the portfolio is taken as at 1^st January 2019. In this case, according to your example, it contains: 0.1 BTC, 1 ETH, 25 LTC, 100,000 siacoin, 770 XRP. Next, the last tax value of each cryptocurrency is identified, i.e. their value at the time of the last exchange or purchase. This is rather complex to describe succinctly in a comment. If, for example, the 100,000 siacoin came from an exchange in 2018 against 0.002 BTC, their value to be taken into account as at 1^st January 2019 is the value that the 0.002 BTC had at the time of the exchange in 2018.

26) Is a commission taken by an exchange on a purchase included in the acquisition price of a portfolio? For example, I buy 1 BTC for €1,000 and I am charged 0.02 BTC in commission. I therefore have 0.98 BTC. Is the acquisition price €1,000 or €980?

The acquisition price is €1,000. But beware of flawed reasoning. The fact that the acquisition price is €1,000 and not €980 is a positive thing for the taxpayer and makes it possible to take the exchange‘s commission into account. Indeed, the taxable capital gain will be reduced as a result, since 1,000 will be deducted, and not merely 980. Mechanically, the commission will therefore have been deducted. In a way, it can be said that not taking the commission into account on purchase ultimately amounts to taking it into account, since the taxable capital gain will be reduced as a result.
On sale, the situation would be quite different: there, the commission would have to be deducted, which the text moreover clearly provides for.

27) If I understand correctly what must be declared this year (for trades carried out in 2019): only disposals of cryptocurrencies into fiat (euro, US dollar, etc.) are a taxable event; the tax will be calculated on the net balance (profits – losses); the calculation method to be used is: first in, first out and average daily price; form to be used: calculate the taxable capital gain on return No. 2086 and carry this amount over to line 3 AN of the 2042 C. Is there an additional form? A more intrusive one? One that you may describe in one of your previous answers?

My questions: have I forgotten anything? Where can this additional form be found? In this additional form, it states: “Overall value of the digital asset portfolio”. That kind of detail is rather intrusive. Will it be necessary to complete one form per portfolio, i.e. per platform (Kraken, Coinbase, etc.), or a global one also including USB storage devices (Ledger) or software (Exodus wallet, etc.)? Are there any applications/websites (consistent with French tax rules) that make it easier to calculate the amounts to be declared? Are there any French cryptocurrency exchange platforms that issue their clients with IFU documents (single tax form) to make the return easier?

Form 2086 must indeed be completed and the capital gain or capital loss carried over to form 2042. Form 2086 was not yet available at the date of this answer (it is now available on impots.gouv.fr). Please note that the capital gain is calculated according to the rules described in the article and not according to the rules you mention. Form 3916 bis must also be filed. Form 2086 is a global form. To my knowledge, the platforms do not issue IFUs. To my knowledge, no website offers a reliable calculation for the time being.

28) What happens with staking? Are we only taxed when we convert our rewards into fiat currency, or are we taxed under another framework (mining), or perhaps it is even regarded as dividends? If so, how is the capital gain calculated?

There is not yet any specific text on this point, but it could perhaps be treated as interest, taxable as soon as the coins are received, on their fiat equivalent on the day of allocation, at the rate of 31.4% (30% before 2026).

29) Regarding the calculation of the capital gains or losses realised on trades with cryptocurrencies, is there a form or presentation rules detailing this calculation for each session, while complying with the formulas already announced? Or are we free to present these calculations on a spreadsheet, each line representing a session?

It is form 2086 that is mandatory.

30) What price reference should be used to determine the overall portfolio, in particular if one holds several different cryptocurrencies spread across several platforms (and therefore with several prices)? The price of each cryptocurrency at time T on the platform where the session takes place? The price of each cryptocurrency at time T on each platform where it is held (price of 1 BTC held on platform A + price of 2 BTC held on platform B, etc.)? Searching for information on other websites, it would appear possible to use reference sites such as Coinmarketcap or Coingecko, where a daily price is established. Is this really possible and sufficient? Given that a daily price can vary enormously between the opening/closing/high/low price, which value should be used (for cryptocurrencies held but not disposed of)? Or should one try to find a more precise value (minute/second)?

The administration accepts the use of websites offering historical average daily prices (such as Coinmarketcap), without naming any one in particular (tax authorities’ guidelines: BOI-RPPM-PVBMC-30-20, § 150). An average daily price also appears acceptable.

31) Can a private individual use income tax + social security contributions (with the 40% allowance) instead of the flat tax? For the declaration of cryptocurrency accounts, must we also declare those opened before 2019?

Until the taxation of 2022 gains, it was not possible to opt for the progressive income tax scale; since 1 January 2023, an option for the progressive scale is possible (without any allowance for the holding period).

If the account was still held in 2019, yes.

32) Is the acquisition price calculated in the same way before the new regime?
Let us take the case of the following transactions, carried out before 2018:

• purchase of 4 BTC X €570 each;
• sale of 2 BTC X €780 each;
• purchase of 3 BTC X €650 each;
• sale of 1 BTC X €800 each;

Is the acquisition price 2,280 – 1,560 + 1,950 – 800 = 1,870, or 2,280 – 1,140 (reduced by the 1^st sale) + 1,950 – 618 (reduced by the 2^nd sale) = 2,472?

As at 1^st January 2019, in your example, the portfolio consists of (applying the first in/first out method): 1 BTC acquired for €570; 3 BTC acquired for €650. Total: €2,520.

33) Where part of the cryptocurrencies has been moved off the exchange platform (in particular to a personal wallet on one’s computer/mobile, or to another platform) between the time of acquisition and the time of disposal, what amount should be taken into account for the overall value of the portfolio? All assets, including those held in a personal wallet? Only those on the platform where the disposal took place? Those on all platforms (therefore excluding wallets), if the assets are spread out (in particular to guard against the risk of a platform being hacked)?

For example, in the case of a purchase for €1,000: part of it serves as a long-term investment, say €750, to be kept in a private wallet to guard against platform-related risks; the remainder, €250, stays on the platform so that a few occasional trades can be made.

All cryptocurrencies, whatever their types/places of storage, are taken into account in the value of the overall portfolio.

34) In the calculation formula for the new regime, does the total value of the portfolio at the time of the disposal include the euros held on the exchange platform?

No.

35) For confirmation: does taxation also concern the conversion of cryptocurrencies into fiat within the portfolio itself, or only the fiat transferred to the bank account?

It concerns all conversions into fiat, even if not repatriated to the bank account.

36) Must faucets also be declared?

We have no clarification on this point to date. It would appear, however, that faucets (such as Bitcoin Aliens, Bonus Bitcoin, Cointiply…) should not fall within the scope of the regime, since they involve the allocation of coins in exchange for what could be described as services. They are therefore not purchases/sales of coins. These coins could, however, remain taxable under other regimes.

37) Regarding the method of declaring interest in coins, starting from the basic assumption that this interest in coins has not been converted into fiat:

• question 1: would this declaration necessarily entail taxation afterwards, or would it just be an informative declaration so that the administration is aware, without there being any tax if the coins have not been converted into fiat?;
• question 2: in what form should this interest be declared?: simply give the amount in coins (example: 0.0000XXXX BTC); or give the amount in coins with its fiat equivalent on the day of declaration (example: 0.000XXXXX BTC = €XXX.XX); or give the amount directly in fiat?;
• question 3: at what point in the return should this be done; is there a specific box?

This declaration would entail taxation at the flat tax rate, i.e. taxation at 31.4% since 2026, 30% previously (unless the progressive scale is opted for, which is sometimes more favourable, depending on the situation).
It would seem to me that the fiat equivalent at the time the coins were allocated to you should be indicated.
The declaration is to be made during the annual income tax return period. You will have to complete the standard return, which you are probably familiar with, No. 2042.

38) Two starting premises so as not to revisit them: I know that it is the conversion of cryptocurrencies into fiat that is taxed and that “crypto-to-crypto” transactions are not; I have only acquired so far and never resold anything, so there is no issue on that point; my exchange accounts have been declared since last year, with the exception of one, since at the time this platform only handled “crypto-to-crypto” transactions without being able to receive fiat and was therefore not concerned. Under the law, it will be declared this year. Here, below, is the heart of my question.

I am perhaps considering opening an account with crypto.com (https://crypto.com/en/index.html), with a card such as the Ruby Steel, and I see that there is cashback in MCO and that making a deposit in BTC, for example, and leaving it there, generates interest in BTC depending on the number of MCO “staked”. I have been following tax news regarding cryptocurrency, BNC, BIC, capital gains on movable property and depending on whether or not the activity is habitual, for quite some time now.

But here I am scratching my head: while buying BTC once, on a given day, for example, and selling everything at once 5 years later can a priori quite legitimately be considered a one-off activity, I wonder whether the daily generation of interest and cashback (especially the interest, not so much the cashback) might not start to fall into the “habitual activity” category (= BIC, company return, bookkeeping, etc.), even if one merely accumulates without reselling. Or would it just be considered as accumulation with a 100% capital gain on resale, since one received interest or cashback in cryptocurrency without buying it?

Indeed, if I read the Bofip here: https://bofip.impots.gouv.fr/bofip/4755-PGP.html, I see right at the bottom, in small print, the remark on the third line from the end: “The criteria for habitual or occasional exercise of the activity result from a case-by-case examination of the factual circumstances in which the purchase and resale transactions are carried out (the time between the purchase and resale dates, the number of digital assets sold, the conditions of their acquisition, etc.).” It does say: “the conditions of their acquisition”, and given that there is precisely no precise definition, I wonder whether the generation of interest could fall within the conditions of acquisition for a habitual activity, or whether habitual activity necessarily presupposes regular active actions (= purchase, concrete action on my part), whereas the generation of interest is a regular passive action (= no concrete action on my part, the cryptocurrency interest just comes in by itself).

So, in summary: could the fact that a cryptocurrency investment generates interest create the possibility, however slight, that the activity may be classified as habitual? The same applies, to a lesser extent, to cashback. In any case, keeping a detailed spreadsheet recording the fiat prices of the cryptocurrency concerned by the interest or cashback on the day of receipt would seem to me essential in the event of resale into fiat.

We do not, to date, have precise answers on these points. However, with relative certainty, coins allocated as interest should not contribute to the beneficiary’s status being regarded as professional. Indeed, this income appears to be entirely passive. The basic tax rules regard interest as passive income. Whether or not this interest is paid in coins does not seem to me to change matters. On the other hand, please note that, having already worked on these questions for various clients (this practice is becoming increasingly widespread), it seems to me that coins allocated as interest must be declared as investment income. Indeed, in keeping with the preceding reasoning, the fact that they are coins does not, in my view, change the analysis. These coins would appear to have to be regarded as investment income. They would then have to be declared annually, whether or not they have been exchanged for fiat.

39) Regarding formula 2, my purchase price has been modified. My portfolio reaches 3,400. Disposal price 3,400. 3,400 – [(6,000 – 3,230.76) X 3,400 / 3,400] = 3,400 – 2,769.24 = €630.76. 6,000. Initial purchase – 3,230.76.

I took the example above, which gives me this formula 2 below: 3,400 – [2,769.24 X 3,400 / 3,400] = 3,400 – 2,769.24 = €630.76, which gives me the same result.

Should I go back to formula 1 when my portfolio balance is at 0, or use a formula: 2,500 – [(2,000 + 0) X 2,500 / 2,500] = 2,500 – 2,000 = €500?

I understand the terms of your example and your question. Your formulas 1 and 2 are correct. You must continue with the formula and not start again from 0. But this should lead to the same result. Step 3: if I continue with the formula (which is what must be done), I start by calculating the new value of the portfolio purchase price, which gives: 6,000 – 3,230.76 – (3,400 – 630.76) + 2,000 = 2,000. We do indeed come back to the 2,000 of the investment in step 3, since my portfolio had returned to 0 following the disposal of all my coins in steps 1 and 2. We therefore have the following capital gain: 2,500 – (2,000 X 2,500 / 2,500) = 500. If I had started again from 0, I would have had the same result (but that is not what should be done).

40) Regarding the formulas: I buy €3,000 in February. I buy €3,000 in March. My portfolio reaches €6,500. Disposal price €3,500.

Step 1, formula 1: 3,500 – (6,000 X 3,500 / 6,500) = 3,500 – 3,230.76 = €269.24.

Step 2, formula 2: my portfolio reaches 3,400. Disposal price 3,400. 3,400 – [(6,000 – 3,230.76) X 3,400 / 3,400] = 3,400 – 2,769.24 = €630.76.

I wanted to know whether, when the portfolio is at zero, I could go back to formula 1? Or should I continue with formula 2? For example, I buy €2,000; the portfolio is at 2,500, I make a disposal of 2,500, 2,500 – [(2,000 + 0) X 2,500 / 2,500] = 2,500 – 2,000 = €500.

Your formula 1 is correct. However, formula 2 is not. You forgot to modify the purchase price of the portfolio (indeed, the disposal in step 1 removes coins, and therefore modifies the purchase price of the portfolio). Look at the previous comments; there is an example.

41) Unless I have missed something, this calculation makes absolutely no sense: in August, I buy 1 ETH for €1,000, then 1 BTC for 5,000 in September. The following year, in April, I decide to sell my Ether for €1,500, while at the same time the value of Bitcoin is – to give an example – €15,000. If my calculation is right, 1,500 – (6,000 X 1,500 / 16,000) = €937. That is €281 to pay in tax, whereas the capital gain realised is €500. We therefore end up paying tax on a mere value at a given moment.

The correct calculation in the case you cite would be: 1,500 – (6,000 X 1,500 / 16,500) = €955. This increases the taxable gain (slightly) further. The idea of the formula is to take unrealised capital gains or losses into account immediately. The BTC has gained enormously in value in your example (it goes from 5,000 to €15,000). The unrealised capital gain on the BTC is taken into account by the formula. The taxable gain is therefore €955, whereas if one calculated 1,500 – 1,000, one should be at 500, i.e. €455 more taxable than the economic reality.

But let us go further and imagine that the BTC is also disposed of one minute after the disposal of the ETH. The calculation would be subject to conditions. The acquisition price must first be recalculated (it having been affected by the sale of the ETH one minute earlier): acquisition price = 6,000 – (1,500 – 955) = 5,455. Calculation of the gain on the disposal of the BTC: 15,000 – (5,455 X 15,000 / 15,000) = 9,545. Whereas the real gain is 15,000 – 5,000 = 10,000. The taxable gain is therefore €455 lower than the economic reality.

Things balance out. The calculation formula simply amounts to taking unrealised capital gains and unrealised capital losses into account immediately. But, in the end, once all the transactions have been carried out and the whole portfolio liquidated, it is indeed the real gain that will have been taxed.

42) In a previous comment, someone asked about the applicability of 150 VH bis in the case of short sales of crypto-assets (short positions (short selling) on an exchange such as Kraken, for example). Your answer seemed to indicate that Article 150 VH bis did not apply in this case (at least not for the time being, as there is not yet any case law), because one never becomes the owner of the underlying asset itself. In the meantime, under which tax regime should profits and losses from positions taken on cryptocurrency underlyings be declared? Because I imagine that these gains do not escape taxation.

Is it Cerfa form n^o 2074? Or is there another form for declaring profits/losses from standard leveraged transactions that can apply to any type of underlying?

150 VH bis covers crypto-assets; however, short sales of crypto-assets do not constitute crypto-assets. There is, to date, no clarification on this point, and only a tax ruling request seems to me to make it possible to be certain. Apart from this question, if one considers that 150 VH bis does indeed not apply to the transactions you mention: if the person is carrying on the activity on a professional basis (repeated transactions, etc.), they should register as a professional, with everything that this implies for tax purposes: tax return packages to be filed, taxation under the progressive income tax (IR) scale, etc. If the person does not behave as a professional, the gains are to be declared via form 2074.

43) A person whose portfolio goes from 1,000 to 1,300 with 2 transactions is supposed to declare a capital gain of €750. This will be taxed at 30%, i.e. €225. So out of €300 of real gains, there remains 300 – 225 = €75. The method of calculating the capital gain inflates it. Theoretically, with a simple, straightforward calculation, the portfolio in question, which generated €300 of capital gain, should be subject to a tax (30%) of €90, thus leaving €210.
What do you think? Below is the Bofip example: “In January N, a taxpayer domiciled in France for tax purposes acquires €1,000 of digital assets (he did not previously hold any digital assets). In March N, the overall value of his portfolio is €1,200. He then carries out a disposal for a price of €450. The capital gain relating to this disposal is then determined as follows (I § 1): 450 – (1,000 X 450 / 1,200) = 450 – €375 = €75. In August N, the overall value of his portfolio is €1,300. He then decides to dispose of all the digital assets he holds. To determine the capital gain relating to this new disposal, the total acquisition price must be reduced by the fraction of initial capital of €375 deducted on the previous disposal. That is: 1,300 – [(1,000 – 375) X 1,300 / 1,300] = 1,300 – 625 = €675 of capital gain.”

This regime does not appear to be confiscatory. In the end, the total capital gain taxed is 750, as you point out (75 + 675). And the real capital gain is 750… Indeed, the purchase price = 1,000. Disposal price: 450 in March + 1,300 in August = 1,750. The “true” capital gain is 1,750 – 1,000 = 750. And 750 is also the taxable capital gain found by applying the new calculation rules.
The person has therefore really gained 750, and will have to pay €225 (30% of 750). He therefore has €525 left.

44) Example of a 1^st purchase: purchase of 2 LTC for €220 then resale at €700. The capital gain is €480, but the disposal price is below 300 €. Will the capital gain not be taxed, only declared?

Example of a 2^nd purchase: 2 ETH for €150, then resale at €800. The capital gain is €650, but I am taxable on €65 because (€220 + €150) = €370 > €305 annual. Does this mean I will be taxed at 30% on €65?

The disposal price of the first sale (€700) exceeds €305; the capital gain will therefore have to be declared (one does not look at the capital gain on each coin but at the capital gain on the transaction as a whole, i.e. on both LTC). The capital gain is 700 – 220 = €480.

The second capital gain amounts to €650 (800 – 150).

The total capital gain is 480 + 650 = 1,130, and will be taxed at 31.4% (30% for disposals prior to 2025). The €305 threshold indeed works as a ratchet; once exceeded, the whole amount is taxable (no €305 allowance is applied).

45) Given that the cryptocurrency – fiat conversion is taxable, what about the “crypto-to-crypto stablecoin” conversion? Currently, I am more of a holder, but I have sometimes converted my cryptocurrencies into fiat to change my portfolio or to escape a sharp fall in the price. The capital gain is therefore taxable even if I reinject everything into cryptocurrency each time. Given that a stablecoin is a cryptocurrency, is a cryptocurrency-to-stablecoin exchange taxable in the same way as a cryptocurrency – fiat exchange?

A priori, stablecoins are not considered to be fiat. The cryptocurrency – stablecoin exchange therefore does not appear to be taxable.

46) There is something that bothers me in the calculation of your capital gains. I fully understand that the State wants to recover money wherever there is any, but in this case, the fact that losses cannot be recovered (at least that is what I understood) poses an enormous problem. Here is an example: I acquire 1 BTC for €10,000 in 2018; I exchange 0.5 BTC for 50 LTC in May; in June, I sell these 50 LTC for a sum of €6,000. On 31 December, I hold: 0.5 BTC valued at €5,000 and €6,000 in cash. The capital gain calculation gives €1,000, a sum that I must declare. I am taxed at 30%. I therefore have a net capital gain of €700. On 1 January 2019, the BTC price falls, and I sell the remaining 0.5 BTC for €4,000. I withdraw permanently from the cryptocurrency market and close my exchange account. The capital loss for 2019 is €1,000.

Overall, my cryptocurrency experience has earned me 0, and yet, in this story, I have freely given €300 to the State. In this example, it comes down to a single day. Please understand that there is something quite wrong here; it is even absurd.

Another subject: in actual fact, calculating the capital gain is virtually impossible for a day trader. One has to imagine that a trader exchanges all cryptocurrencies against fiat, but also all cryptocurrencies against others. And this thousands of times a year, and millions of times more if they use bots.
Beyond the fact that an accountant would be needed to arrive at an exact count (and even then…), there is still something that does not work: I buy: 1 BTC for €10,000, 100 LTC for €10,000, 50 ETH for €10,000, 10,000 XRP for €10,000. I do my own thing all year, I exchange the cryptocurrencies among themselves, and at the end of the year I have €0 in cash, but I have twice as much cryptocurrency. Two scenarios: I made 100% “crypto-to-crypto” exchanges; I made exchanges going through fiat at certain times. It is impossible to tell the difference, it is invisible (this is more or less true for the time being), so one could just as well declare a capital gain of 0 or of €XXXX.

I do understand that we are supposed to declare them, but in reality, for taxation to be correctly applicable and not impossible to manage, should we not declare capital gains only when an amount exceeding the initial investment comes back to the current account or when a physical good is purchased with it? Or, another option, declare the value of the portfolio each year, provided that capital losses become recoverable. That would make much more sense, because at present it is really nonsensical and almost theft in some cases!

The regime applicable since 1^st January 2019 allows capital losses to be offset against capital gains (as written in the article). In your example, there is no issue (at least, no technical one). You isolate the fiat exchanges, which generate a tax event (capital gain or loss). Exchanges between cryptocurrencies are not taxable and no calculation needs to be made. Beyond that, if the new regime does not seem relevant to you, that is another debate…

47) I am coming back to you regarding this article to obtain two small additional clarifications: firstly, are short or long transactions (on Kraken, for example) taxable in the same way as standard disposals of cryptocurrency? If so, using what calculation method? Since these are not acquisitions or sales as such, but rather the opening of positions in which one does not own the cryptocurrency (given that, taking the example of a short, it involves borrowing cryptocurrency from the broker when opening the position, then repaying this loan when closing the position), I was wondering what method might be in place to quantify the capital gains or losses realised in this context.

Secondly, your calculation example ends with the person generating a capital gain of €4,278 (5,000 – (1,300 X 5,000 / 9,000)) following the disposal of 10 LTC. Still within this example, the person therefore has 5 ETH left in their portfolio in December 2022. Let us assume that in December 2023, ETH has gained further in value and 1 ETH is now worth €1,000 (remember that it was worth €800 in December 2022). The person decides to dispose of 3 ETH of their 5 remaining ETH on that date. Based on the logic of the 1^st example, I would have calculated the “new” capital gain as follows: €3,000 – (€650 X €3,000 / €5,000) = €2,610. The €3,000 representing the disposal price of the 3 ETH in December 2023, the €650 representing the acquisition price of 5 ETH in January 2019, the €5,000 representing the total value of the portfolio at the time of the disposal. Could you say whether this is correct? I had a doubt about the total purchase price of the portfolio to be taken into account: the initial €1,300, or the €650 (half of this €1,300, since it concerns 5 ETH out of the 10 ETH purchased at the beginning of the example).

The question also arises as to the applicability of 150 VH bis (the new regime), which covers cryptocurrencies. However, positions taken on cryptocurrency underlyings do not appear to be crypto-assets in themselves. There is therefore a real legal question here, which has not yet been settled at present. In your example, the calculation would be: 3,000 – (578 X 3,000 / 5,000) = €2,653.2. 1,300 – (5,000 – 4,278) = €578, which represents the acquisition price of the portfolio at the time of the disposal.

48) In your article, you detail the calculation made, with which I agree, but on which I have one remark. In amendment II-2523 to Article 150 VH bis, in paragraph III/B, third subparagraph, one can read: “The total acquisition price determined by application of the first two subparagraphs of this B (N.B.: this is consistent with what you describe) is reduced by the sum of the fractions of initial capital contained in the value or price of each of the various disposals of crypto-assets, whether gratuitous or for consideration, excluding exchanges that benefited from the deferral of taxation provided for in II, previously carried out.”
My question: how do you understand this second part of the sentence, which would mean subtracting the fractions of initial capital contained in the price of each previous sale? A simple example with two fiat disposals in the year would be interesting.

Good question. Let us go back to two sentences of the text. Subparagraph 1 of B tells us: “The total acquisition price of the digital asset portfolio is equal to the sum of the prices actually paid in legal tender currency on the occasion of all acquisitions of digital assets”. Subparagraph 3, which you quote, tells us: “The total acquisition price determined by application of the first two subparagraphs of this B is reduced by the sum of the fractions of initial capital contained in the value or price of each of the various disposals of digital assets […] previously carried out.” This means that at each disposal, the acquisition price of the portfolio must be recalculated, taking into account the previous fiat disposals, which reduce the acquisition price, since fiat has been recovered (fiat has come in).

Example: on 1^st January 2019, acquisition of 1 BTC for €3,800; on 1^st February 2019, acquisition of 1 BTC for €3,300; on 7 April, disposal of 1 BTC for €4,800; on 10 May, disposal of 1 BTC for €7,500.

Calculation of taxable gains (application of the formula of 150 VH bis of the CGI): 7 April: 4,800 – (7,100 X 4,800 / 9,600) = 1,250. 4,800 represents the disposal price, 7,100 represents the purchase price of the portfolio (3,800 + 3,300). 4,800 is again the disposal price and 9,600 is the market value of the portfolio at the time of the disposal (2 BTC at a price of €4,800). On 10 May: 7,500 – (3,550 X 7,500 / 7,500) = 3,950. 7,500 represents the disposal price, 3,550 represents the purchase price of the portfolio: 7,100 – (4,800 – 1,250). The purchase price is reduced by the fraction of initial capital contained in the previous fiat disposal. 7,500 is again the disposal price and 7,500 is the market value of the portfolio at the time of the disposal (1 BTC at a price of €7,500).

Topic 3: declaring foreign cryptocurrency accounts

49) If we opened an account abroad – Coinbase, for example – in 2018, but have not declared it until now, can this be penalised?

The reporting obligation starts in 2020 for 2019 foreign cryptocurrency accounts. In my view, there can therefore be no omission in respect of previous years and therefore no penalty. Exception: exchanges that combine cryptocurrency and fiat, such as Coinbase or Kraken. There, one may ask whether these exchanges were covered by the very long-standing reporting obligation concerning standard foreign accounts. We have no answer on this point to date.

50) Regarding the average daily price, do you mean “average between opening price and closing price”, or “between highest price and lowest price”? (on Coinmarketcap, it says that this is not the value for a day’s history).

Finally, one last small question regarding the declaration of accounts: when one holds an account on Coinbase and on Coinbase Pro (originally, the Pro platform was a takeover of a former platform, GDAX, I believe), should one or two declarations be completed? Same issue with standard Binance and Binance Jersey.

The tax authorities have not taken a position on this question and simply state that an average daily price is acceptable. In practice, any objective method, and above all one that is used consistently, would probably appear acceptable (do not use one averaging method for one transaction and another averaging method for another…). Broadly speaking, one should not try to “play” with the methods to reduce one’s capital gain. There must be consistency in the method used.

The “Pro” and “Jersey” platforms are, to my knowledge, separate from the “standard” platforms and entail the opening of new accounts. Each account would therefore appear to have to be declared.

51) For the purposes of the 3916 declaration of accounts opened abroad, should one: declare only the accounts holding legal tender in euros plus cryptocurrencies (Coinbase, Kraken), or also the accounts holding only cryptocurrencies – I am thinking of Bitmex, for example? Should other open accounts holding neither legal tender currency nor cryptocurrencies be declared? (Accounts opened for testing purposes, such as eToro, Bybit…).

All foreign cryptocurrency accounts appear to be concerned, whether or not these accounts can hold fiat. The obligation to declare foreign cryptocurrency accounts is new and dates from 1 January 2019. Other types of accounts receiving deposits of securities, stocks or cash must be declared via form 3916 + ticking box 8UU of form 2042 (this obligation has existed for a very long time and concerns all accounts opened outside France with a bank or any other institution that habitually receives deposits of securities, stocks or cash).

52) If the exchanges were opened before 2019, they had to be declared in 2019. However, in 2019 this was not yet mandatory, only in 2020. Is this correct?

An exchange opened before 2019 must be declared from the 2020 filing campaign for 2019 income onwards.

53) Wallets do not have to be declared, but if these wallets have their own exchange (examples: Guarda or Trust Wallet), must they be declared? If we only used our wallets to store our crypto-assets without using their exchanges, do we therefore not have to declare them?

As a precaution, in this situation, it seems preferable to declare them.

54) Must exchanges be declared only if we completed registration 100% (identity verification or invoice), or also if we abandoned registration midway?

This specific question does not appear to have been settled to date.

The texts cover accounts opened, held, used or closed abroad. If the account is operational, even though identity verification has not been carried out, it might therefore appear that the account would nevertheless fall within the reporting obligation.

55) Must fiat exchanges (examples: Kraken or Coinbase) be declared only in the declaration of cryptocurrency accounts? If we make a transfer from the fiat exchange to our bank account, will the tax authorities not penalise us for having declared it only as a cryptocurrency account and not in the existing declaration of foreign accounts?

This specific question does not appear to have been settled to date.

Exchanges such as Kraken must certainly be declared as cryptocurrency accounts. Furthermore, as a precaution, it might seem advisable to also declare them as standard bank accounts. It is, however, worth noting that declaring them as standard bank accounts will involve stating an account opening date that may be prior to 2019, with, in principle, the possibility for the tax authorities to apply fines in respect of some of the previous years.

56) For the declaration of a Skrill account, if the amount of €10,000 is exceeded, must it be declared twice (cryptocurrency account + bank account)?

This specific question does not appear to have been settled to date. However, as regards accounts that allow the handling of both fiat and cryptocurrencies, and which are close to a “standard” bank account, such as Skrill, it might appear that the dual reporting obligation (crypto-asset and foreign assets) applies.

57) Let us imagine that in 2018 a Coinbase account was opened and BTC purchased. Was it necessary to declare the opening of a Coinbase account on the 2019 return, for 2018? Or does this obligation only take effect from 2020 (to be declared in 2020 for 2019)?

The rules concerning the declaration of foreign cryptocurrency accounts apply from 1 January 2020 (in 2020, the 2019 accounts are declared) in respect of accounts opened, held, used or closed abroad in 2019.

However, there has for many years been a reporting obligation concerning foreign assets (bank accounts, life insurance policies, etc.). The question of whether certain foreign exchanges that allow fiat to be handled fell within this reporting obligation has not yet been settled to date.

58) Exchanges must be declared. Must wallets (“Ledger” or “mobile wallets”) also be declared?

Article 1649 bis C of the CGI, in its version applicable from 1 January 2020, expressly covers companies, legal entities, institutions or bodies established abroad. The question of cold wallets unfortunately appears, to date, to be unclear and without an entirely certain answer.

59) Skrill offers to buy cryptocurrencies. It is in no way a bank account or an exchange, but rather an online service. Must it nevertheless be declared?

Skrill appears to allow – unless I am mistaken – the storage of cryptocurrencies (it appears possible to hold coins in a Skrill account). Consequently, the account opened with Skrill would appear to have to be declared.

60) Let us imagine accounts on cryptocurrency exchanges in 2017: is the declaration of these only required from 2020, and is the person not in breach before that period? Also, must closed accounts be declared as well? Are declarations of foreign accounts made only once, or annually?

The new provisions apply to foreign cryptocurrency accounts opened, held, used or closed from 1 January 2019. In 2020, foreign cryptocurrency accounts opened, held, used or closed in 2019 will have to be declared. The declaration will have to be renewed each year. Accounts closed in 2019 will have to be declared.

61) From when did the declaration become mandatory, following the new tax regime?

The regime is applicable from 1 January 2019. Accounts held from 1 January 2019 must be declared. As always, this declaration is made the following year, as for income. That is, during the 2020 filing period. In 2020, therefore, the gains or losses realised during 2019 and the foreign cryptocurrency accounts held during 2019 were declared. In 2021, the same will have to be done again in respect of 2020, and so on.

62) Regarding the declaration of foreign accounts, are only accounts into which euros (fiat) can be deposited, and therefore for which one has an account number (IBAN/SWIFT), such as Kraken, Coinbase, etc., to be declared? Or must other exchanges, such as Bittrex or Poloniex, to which fiat cannot be sent, also be declared? In that case, what should be entered as the account number?

All foreign exchanges are concerned, whether or not they allow transactions in fiat. Form 3916 bis must be completed for each foreign exchange, and this every year.

Topic 4: the former regime. Calculation and taxation of gains or losses on cryptocurrencies realised before 2019

63) In addition to a Kraken account, I have an account on Binance, but without using euros in exchanges. I only use USDT, a stablecoin. Must the Binance account be declared, like the Kraken account, for 2019? Must the capital gains or losses for 2019 on the Binance account be declared? For 2018, I declared nothing, either for the Kraken account or for Binance, since my capital gains or losses remained below €5,000. To tell the truth, they were rather losses. Must this be done in 2019, because of the change in legislation?
At the end of 2017, I opened an account on Coinbase, and in January 2018 I transferred all my cryptocurrencies to Kraken. Since then, the Coinbase account, reduced to zero, is no longer accessible. Must it also be declared, even though I no longer have the codes to access it and am thus unable to show anything relating to the account?

Binance is a foreign exchange platform that falls within the reporting obligation.
From 2019 transactions onwards, the capital gain must be calculated on the basis of all taxable transactions (those involving fiat, goods or services), whatever the medium or exchange on which the transaction was carried out. As regards the situation prior to 2019, if the person is considered an occasional trader, the regime for capital gains on movable property applies and there is an exemption for disposals or exchanges below €5,000 (amount of the disposal and not of the gain). If returns were omitted, regularisation may be considered. All foreign accounts still “alive” during 2019 fall within the reporting obligation.

64)

1) If, in 2019, a disposal is made of cryptocurrencies acquired in 2018, how is the total acquisition price of the portfolio (needed for the 150 VH bis formula) to be determined if sales of part of these cryptocurrencies were already made in 2018? Example to illustrate the question:

• in February 2018, acquisition of 1 BTC for €5,000;
• in April 2018, acquisition of 2 ETH for €600 (1 ETH = €300);
• in May 2018, sale of 2 ETH for €1,400 (1 ETH = €700) (noting that 1 BTC = €8,000 on that date);
• in May 2019, sale of 1 BTC for €8,000.

Under the regime for capital gains on movable property (PVBM), still applicable in 2018, the capital gain corresponding to the sale of the 2 ETH is calculated, unless I am mistaken, as follows: 1,400 – 600 = €800 (no declaration to be made via form 2048M, since the disposal is below €5,000). The total acquisition price of the portfolio after this disposal becomes €5,000 (price corresponding to the purchase of 1 BTC in February 2018), unless I am mistaken.

Under the new regime applicable since 1 January 2019: the capital gain would have been: 1,400 – (5,600 X 1,400 / 9,400) = €566; €1,400 representing the disposal price of 2 ETH in May 2018, €5,600 the purchase price of the portfolio, and €9,400 the value of the portfolio at the time of the disposal (8,000 + 1,400). The total acquisition price of the portfolio after this disposal would become 5,600 – (1,400 – 566) = €4,766 (instead of €5,000 under the former regime).

The question is as follows: what value of the total acquisition price of the portfolio should be taken into account for calculating the capital gain relating to the sale of 1 BTC in May 2019? €4,766 or €5,000?

2) I take the liberty of reusing one of your examples in the discussion thread, adding a transaction to it. Could you tell me whether my calculation of the taxable gains on the 10 May disposal is correct, taking this change into account? Example:

• on 1^st January 2019, acquisition of 1 BTC for €3,800;
• on 1^st February 2019, acquisition of 1 BTC for €3,300;
• on 7 April, disposal of 1 BTC for €4,800;
• on 24 April 2019, acquisition of 1 BTC for €5,000 (added transaction);
• on 10 May, disposal of 1 BTC for €7,500.

Calculation of taxable gains (application of the formula of Article 150 VH bis of the CGI):

• 7 April: 4,800 – (7,100 X 4,800 / 9,600) = €1,250. 4,800 represents the disposal price, 7,100 the purchase price of the portfolio (3,800 + 3,300), 4,800 again the disposal price and 9,600 is the market value of the portfolio at the time of the disposal (2 BTC at a price of €4,800);
• 10 May: 7,500 – (8,550 X 7,500 / 15,000) = €3,225. 7,500 represents the disposal price,
  8,550 the purchase price of the portfolio (7,100 – (4,800 – 1,250) + 5,000). Initial purchase price reduced by the fraction of initial capital contained in the previous fiat disposal + the purchase price of 1 new BTC on 24 April 2019. 7,500 is again the disposal price and 15,000 is the market value of the portfolio at the time of the disposal (2 BTC at a price of €7,500).

3) You mentioned above in an answer that the €305 threshold does not work as a ratchet and that once exceeded, the whole amount is taxable. However, according to the summary statement of sub-amendment N^o II-2576 to amendment 2523, it states that: “This amendment aims to create an annual allowance of €305 on the amount of disposals in order, on the one hand, to exempt from taxation the first 305 euros of disposals made during the year and, on the other hand, to simplify taxpayers’ formalities by authorising them not to file a declaration when they make disposals of a small amount….” This would therefore indeed be a €305 allowance and no reporting obligation if the sum of the capital gains realised throughout the year does not exceed €305. So, if the sum of one’s capital gains during 2019 amounts to €370, only €65 will be subject to tax after the €305 allowance.

4) Do we know more about the regime to be applied for declaring capital gains or losses arising from positions taken on cryptocurrency underlyings (margin trading on the Kraken exchange, for example), given that the applicability of 150 VH bis seems uncertain on this point?

1) Answer: 5,000 (see the very latest Bofip, the official tax bulletin on the new cryptocurrency regime, which addresses this question).
2) Everything is correct.
3) Please note that you are confusing capital gains and disposal prices. The text refers to disposal prices. If the total disposal prices over the year exceed €305, then all transactions are taxable (if a net capital gain is generated, of course). It is therefore indeed a ratchet effect. This is confirmed by the recent Bofip. Furthermore, the text does not use the term allowance but the word exemption. The comments under the amendment should be taken with a pinch of salt; they are made by members of parliament/senators who are not tax specialists and who sometimes use inappropriate words. 150 VH bis states: “B. – Persons carrying out disposals whose total price, as defined in A of III, does not exceed €305 during the tax year, excluding the transactions mentioned in A of this II, are exempt.”
4) The Bofip does not address this point. There is therefore no new light shed on it to date.

65) For capital gains in 2018 or previous years, what had to be declared?

We are under the former system: capital gains of private individuals on movable property. Declarations of capital gains on movable property are not made in N+1 via the standard annual income tax return, but via form 2048M.

66) Under this regime applicable to 2018 and previous years, how are capital gains calculated?

Form 2048M must be completed for each taxable disposal. Even exchanges between cryptocurrencies are taxable if a gain is generated. As regards the acquisition price of the coins sold, it would appear that the weighted average cost method should be applied in most cases (where the assets are fungible, which appears to be the case for cryptocurrencies). Disposals below €5,000 are exempt. Capital losses are lost; they cannot be offset against capital gains.

Topic 5: other topics

67) Does the wealth tax (ISF) apply to cryptocurrencies (whether one is an occasional or habitual trader)?

Since cryptocurrencies were classified as movable property by the Council of State (Conseil d’État), there was little doubt that the wealth tax (ISF) applied to them (until its abolition on 1 January 2018). Two clarifications, however: for professionals (“habitual” traders), the ISF should not in principle apply, since cryptocurrencies should be regarded as professional assets; the real estate wealth tax (Impôt sur la fortune immobilière, IFI) replaced the ISF and applies only to real estate, and therefore not to cryptocurrencies.